Dire Consequences Of Coronavirus: Red Rock Resorts Says $223.7 Million Lost In H1

Article by : Eva Reed Aug 17, 2020

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Red Rock Resorts is one of the most popular casino operators in the United States. Lately, it witnessed the most massive net loss of $223.7 million. The main reason the company found itself in such a deplorable situation is the forced closure of all hotels caused by the coronavirus pandemic. If we analyze the company’s performance as of June 30, 2020, the revenue for the first half of the year was $485.9 million. The same figure in 2019 was 47.8% higher and stood at $929.9 million.

As a reminder, all Red Rock casinos in America have closed their doors since mid-March. These steps were forced by measures. They followed the restrictions imposed by the state to slow down the spread of Covid-19. Thus, the gambling operator remained in standby mode until June 4.

However, such measures have a very negative impact on the financial performance of the gaming brand.

Absolutely all casinos owned by the company witnessed a drop in revenue by 42.1% to $283.9 million in the first half of the year.

Also, the brand said that its food and beverage revenue has also dropped significantly. This is nothing less than a 57.4% loss to $103.3 million. If we analyze the revenue from the activities of hotels owned by Red Rock, then the fall was 53.2% to 45.6 million dollars.

One way or another, almost all other revenue related to the brand’s activities also decreased by 47.4% and amounted to $27.8 million. Perhaps the only good news for Red Rock was the ability to cut operating expenses to $576.8 million. Thus, the company’s total costs decreased by 29.5%. It is worth noting that last year’s figures were $576.8 million.

However, the decline in costs and the considerable drop in revenues in the first half, meant that the operator suffered a whopping $91 million loss. Meanwhile, statistics for 2019 indicate that the company could demonstrate a profit of $111.6 million.

The unprecedented challenges that have emerged this year are directly linked to the Covid-19 pandemic, the company said. Nothing is surprising in such statements since absolutely all casinos in the United States in one way or another recorded a loss in revenue starting from May 2020. That is why the 2nd quarter of 2020 was marked by a 77.5% decrease in total revenue for the casino operator. This corresponds to a drop in indicators to $374.4 million.

It is also vital to pay attention to the revenue indicator from the business that the company does in Las Vegas. The 2nd quarter of 2020 showed a 77.9% loss in this indicator, which amounted to $101.0 million. Nevertheless, the management of the brand says that after the restart, assets located in Nevada are showing very positive indicators. Though the real situation is unlikely to be seen until the end of 2020.

Red Rock Resorts is one of the largest and most successful gaming and casino management companies in the United States. Currently, the operator’s assets consist of 21 casinos, which are scattered throughout the United States. The total value of assets owned by the company is about $6 billion.

To recap, the brand began its activities back in 1976. The first gambling facility was about 5,000 square feet and contained 100 slot machines. Later, due to a successful development strategy and expansion, the land-based casino managed to become one of the most successful suppliers of gaming products for the Las Vegas market. The operator currently runs 10 large-scale entertainment projects and 10 small casinos in Las Vegas.